Intraday Market Thoughts

Archived IMT (2009.10.27)

by Ashraf Laidi
Oct 27, 2009 23:16

AUSSIE CPI PREVIEW: The upcoming Aussie Q3 CPI (00:30 GMT, 20:30 EDT) is expected +0.9% q/q from +0.5% in Q2, while on y/y basis it is expected +1.2% from +1.5%. Also watch the RBAs favourite CPI measure known as trimmed mean CPI, expected +0.7% q/q from +0.8% q/q and exp +3.2% y/y from +3.6%. BUT DO REMEMBER that Monday's release of the PPI was WEAKER than expected. Considering the high correlation between Aussie PPI and CPI, there is a chance of slower than expected figure. BOTTOM LINE, if the q/q CPI comes in at or ABOVE the expected 0.9% (following +0.5%), then we could see a rallying Aussie on increased market certainty of AT LEAST 25-bps rate hike at next weeks RBA meeting. Only a figure of 1.0% or more would help Aussie reach the 0.9230 resistance. A figure at or below 0.7% could see a gradual pullback in the currency, especially if Asia remains in the red. Also expect the bulk of the losses to occur in AUDJPY (near 83.20) in the case of weak figure.


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